Once the Ministry of Justice published its Guidance, it became clear that the government sees bona fide hospitality (ie: that which is not excessive, unreasonable or unduly lavish) as a natural and important part of commerce and does not intend to criminalise it. So a victory for common sense – in the end at least.
So, is today – the day when the Act actually comes into force – a complete non-event for small and medium UK businesses? Are UK directors safe to ignore it? The short answer is: the scaremongering you can ignore, but there are still serious issues you need to pay attention to, particularly if you have business or trading interests overseas. In these circumstances it is crucial that directors understand the law, the impact a breach could have on their company’s reputation and, potentially, themselves as individuals, and what they can do to minimise the dangers.
The penalties are scary – potentially corporate prosecution and even the conviction and imprisonment of individual directors or senior staff who “turn a blind eye”. There is also the risk of being sanctioned by your professional body, being black-listed and debarred from tendering, to say nothing of the impact on your reputation and the costs and resources involved in refuting allegations and protecting the integrity of your business.
In addition any contract secured as a result of corrupt practices may well be unenforceable.
Now for the boring bit: the Bribery Act creates four offences, which are:
- Offering or giving a bribe
- Requesting or receiving a bribe
- Bribing a foreign public official
- As a commercial organisation, failing to prevent bribery by a person “associated” with it. That could include not only employees, but also agents or intermediaries used by the business and its other business partners.
It is this last offence which is cause for the biggest concern, for businesses and directors personally. The good news though, is that there is a defence if the business has put “adequate procedures” in place to prevent an offence. The only problem is, what “procedures” do they need to be, and how “adequate”?
Well, clearly every case will be different (and small organisations will have different challenges to those faced by multi-national enterprises) but there are some fundamental principles which apply across the board. Here’s a sensible checklist:
- Make a proper assessment of the bribery risks your business faces and a review of your current practices and those of the persons acting onbehalf of your organisation.
- Put proportionate procedures put in place to prevent bribery. These will vary from business to business depending on the risks you identify.
- Make sure there is commitment at the highest level to those procedures and the anti-bribery programme.
- Communicate the procedures to everyone in the organisation and make sure people are properly trained.
- Put measures in place for continual monitoring and review of your procedures and practices.
To put it another way, simply having a paper compliance policy will not be enough; there has to be a real buy in by directors and senior managers and genuine implementation. Ask your legal advisers for help if you think you may not have all these bases covered.
Chris Wilks is a partner at SA Law, which specialises in advising small to medium-sized and owner-managed businesses.
Share this story